Good Living and Lucky's Personal Finance Blog

Introspective thoughts on living the good life

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Good Living

After scraping by as a single parent and attending grad school, my nest is now empty and I'm living good. With a little bit of luck and planning, I'm on my way to the next half of life. My second life includes marriage (something I never thought I'd do again)and maybe more parenting through foster care. Long term sights on travel, adventure and early retirement. Nothing fancy, just the ability to choose my days.

Archive for December, 2017

Background:
My wife and I have been living in a small 2 bedroom townhouse (no mortgage) in the metro area and walking distance to my job. We are planning to return to our 3 bedroom 2 bath house (almost 30k remaining on the mortgage) (30 miles away) that we’ve been renting for the last 3 years to the same renter with the purpose of doing foster care. I will be largely the sole income and while I know foster care does some reimbursement, we know it won’t be a lot. I’m 48, my wife is 54. I’ve got good retirement but am too young to retire especially with health insurance being such an unknown. We have no big plans beyond the next two years at least. I also think that while we’ve lived for 18 months in 800 square feet, long term we need more space.
Additionally, I’ve got shared ownership (with my two sisters) of a small 1 bedroom cabin (no mortgage) on 40 acres (no lake) 2 hours away. They are no longer interested in owning it and so I need to buy them out. The tax assessed value is almost 100k. One sister wants the buy out in one lump sum and the other is open to payments.
What I need help on is trying to figure out once we have re-located to the house, what do I want to do with the townhouse. There is no mortgage and bought it 5 years ago and it’s tripled in value.
Question and other details…
Once we’ve fully moved into the house and the townhouse is empty, I am trying to figure out what to do with it. I see two options rent or sell, perhaps you have another idea?

Renting option:

If I rent it, between property taxes, HOA, renter management (I don’t want to deal with it) I might clear around $500 a month. I could use this to make payments to one sister and pay on a loan for the lump sum payout for the other one. The benefit is that I would hold on to the property and we could always move back into it down the road….but we might not want to go that small again. We have dreamed about using it as a home base while traveling extensively in an RV once we’re older. It’s one level, walking distance to my current job of 10 years, and supposed to be on the light rail line eventually (maybe 5 years) and very easy to close up and leave for long periods of time. When we rent a property, we’re always at risk for damage, including a built in oak Murphy bed in the living room area.

Sale option:

If I sell it, the proceeds will be used to pay off mortgage on the house, pay lump sum to sister for the cabin and balance to other sister and any balance set to payment schedule. If I sell it, it would also free up some of my cash flow during the month because I wouldn’t be paying property taxes and HOA fees (on the townhouse) or mortgage (on the house). We would also lose the Murphy bed because it’s too expensive to move. This would simplify all the property we own from three down to two.

Bonus question:

The cabin was started by our father before he was killed. It’s very sacred space to me and has annual expenses of approximately $5000 between taxes, insurance and operating expenses. Some of the land is rented for agricultural purposes and we gain somewhere between $1500 (corn crops) or $600 (hay crop). Unfortunately, we are only out there approximately 6-12 times a year. My life is too busy to do much more and I feel like we should leverage this space a bit more. We’ve thought about Airbnb or VRBO and the challenge is that we’d have to either hire someone to manage it or at the very least clean after each guest. It would require very special guests to stay as it’s small and simple. Electric and water but minimal cooking facilities and no internet. It might be really nice for a writer or artist as get away. Many people might be interested in renting it for hunting but my Dad was against hunting and I want to hold the land as my father would have wanted to. I do realize at some point, I might have to let the cabin go but I’m not quite ready to do that yet.

I bought a Honda Fit, it was the first time I spent more than $3200 on a car (except for when I bought the truck from my Dad's estate). I looked at a private party's car over the weekend but it had more damage than he indicated. Thankfully, I've got a good mechanic that checked it out. He recommended that I find one at a dealer because then I know it's been looked over and not a salvage title. I knew I would have to pay more but I guess it was worth it. I found one that was a manual transmission and the price was dropping. I also ended up calling Costco's auto service which automatically got me $200 off. I also get 50% off a repair up to $100. It was totally worth it! I'm glad I checked it out. I prefer manual transmission but it's been a while and it has a feature that I can monitor my mpg which I hope I will adapt to because otherwise I focus too much on it.

In 19 days the renter will be out of the house and we'll be able to go check it out. I sure hope it's not too trashed and we won't need to do too much work to repair it. I'm looking forward to the simple things like a dishwasher and much better water. I think I will actually enjoy the commute too, a chance to listen to podcasts and audiobooks. What are your favorite podcasts? I used to listen to Dick Gordon - The Story which I LOVED, sadly, he returned to Canada. I like The Moth radio hour, dinner party download(for as much as I've heard it), This American Life (of course!).